Ireland bailout talks continue

Former Celtic Tiger looking at getting billions of dollars of loans to pull itself out of its financial mess.

19 Nov 2010 10:28 GMT

Ireland is looking at getting billions of dollars of loans to pull itself out of its financial difficulties, according to the country's central bank governor.

Experts from the European Commission, European Central Bank and International Monetary Fund continued to explore on Friday the scope and terms of a bailout. The talks in Dublin are expected to run into next week.

But Al Jazeera's Alan Fisher reported from the Irish capital, that the government is refusing to commit to any kind of deal.

Brian Lenihan, the Irish finance minister, insists that his government needs no money itself because it is fully funded through mid-2011. But Lenihan says he would welcome a prop for the country's troubled banks, effectively an overdraft or credit line.

"The banks grew to such a size that they became too unmanageable for the state itself. That's the big difficulty here. And it's clear that we will need some form of external assistance to address the difficulties," Lenihan said at the conclusion of talks at the Irish Central Bank.

The prospect of a bailout loan for Ireland offers little reassurance that other corners of Europe could cope with their own crushing levels of government debt.

After Greece and likely Ireland, analysts say Portugal may be the next country in the 16-nation euro zone to need assistance. They suggest the crisis is now being driven less by irrational fears than by a growing realisation that debts are too big for vulnerable nations to refinance, never mind payback.